TENCENT Holdings leapt almost 4 per cent after Beijing signalled a willingness to soften proposed gaming restrictions, reassuring investors bracing for renewed curbs on the world’s largest mobile arena.

Tencent climbed as much as 3.9 per cent while smaller rival NetEase jumped more than 14 per cent in their first trading session after the government appeared to try and assuage the market, tracking a Tuesday (Dec 26) rebound in mainland Chinese-traded peers. Bilibili, a streaming service popular with gamers, gained more than 6 per cent.

But their bounce-back recouped just a fraction of Friday’s US$80 billion rout, after regulators slapped sweeping new restrictions on in-game spending and playing time. Investors remain on edge following the surprise imposition of the curbs, which revived fears that Beijing may again target the online content sphere. Tencent remains down about 9 per cent from before the regulations surfaced.

The government has since sought to soften its stance. Over the weekend, state-backed media carried comments from industry groups that cast the guidelines in a positive light, while the regulator itself approved a record 105 games for domestic publication and promised to review its more controversial mandates. A slew of gaming companies have also announced share buyback plans, to showcase their confidence.

“The normalised approval schedule despite the release of updated ‘guideline’ suggests the government remains supportive on the healthy development of the online games industry,” Citigroup analysts including Alicia Yap wrote in a Tuesday note. “It is positive for the sector to see major studios obtaining quality titles.”

Investors hope regulators will roll back at least some of the more divisive rules, now taking industry feedback over the next month. But fears of tech regulation run deep in China.

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The sweeping gaming restrictions, which caught industry players and investors off guard on the final trading day before Christmas, reminded many of the brutal tech-sector crackdown of 2021. That year, various agencies abruptly imposed curbs on sectors from e-commerce to entertainment, reining in Jack Ma-backed Ant Group and Alibaba Group Holding while decimating the online education industry by declaring profits illegal. BLOOMBERG